5 Which of the following factors could cause a company’s gross profit percentage on sales
5 Which of the following factors could cause a company’s gross profit percentage on sales to fall below the expected
level?
1 Understatement of closing inventories.
2 The incorrect inclusion in purchases of invoices relating to goods supplied in the following period.
3 The inclusion in sales of the proceeds of sale of non-current assets.
4 Increased cost of carriage charges borne by the company on goods sent to customers.
A 3 and 4
B 2 and 4
C 1 and 2
D 1 and 3
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